S’pore extends loan to oil-linked firms
LIQUIDITY BOOST: Struggling marine and offshore engineering companies will have access to as much as S$5m loan each
SINGAPORE will provide financing support to the country’s marine and offshore engineering companies to help ease some of the liquidity problems the industry has been facing amid weak oil prices.
Companies in that sector would have access to borrow as much as S$5 million (RM15.55 million) each for as long as six years, said the Ministry of Trade and Industry in a statement yesterday.
The maximum amount a borrower group would have was S$15 million, it said. The loans would be available starting next month, it added.
The global centre for oil-rig construction for decades, the slowdown in the industry contributed to Singapore’s economy contracting in the third quarter as companies struggle to meet debt obligations and cut jobs.
Output in the marine and offshore engineering sector fell 32 per cent in the 10 months through October from a year ago, the worst-performing industry in the island city, according to data from the country’s Economic Development Board.
“Some industry consolidation was inevitable as companies restructure and adapt to the challenging environment,” said S. Iswaran, Singapore’s trade minister.
“These targeted measures aim to help preserve the marine and offshore engineering industry’s core capabilities, which have been built up over the years and would be important to seize future opportunities.”
Companies would also receive as much as S$70 million for project and asset financing support, raised from the current S$30 million, according to the statement.
The city-state’s economy was expected to grow one to 1.5 per cent, down from the previous estimate of as much as two per cent growth, amid slowdown in global trade and lower energy prices that’s hurting the oil and gas services industry, said the trade ministry on Thursday.
from the market value of Keppel Corp, Sembcorp Marine Ltd and Singapore’s other listed oil-services companies. Bloomberg pic
The city-state’s economy shrank an annualised two per cent in the third quarter.
More than two years of tumbling oil prices have wiped about US$15 billion (RM66.6 billion) from the
market value of Keppel Corp, Sembcorp Marine Ltd and Singapore’s other listed oil-services companies. Since then, at least 25,000 jobs have been axed.
The oil industry may cut spending
for a third straight year next year as lower costs kick in and companies continue to grapple with weaker finances because of crude’s slump, said the International Energy Agency in September. Bloomberg